Dollar and yen are mildly lower as the week starts quietly on higher opens in Asian stocks. Nevertheless, the moves are limited as Asian equities reverse early gains into European session. After all, with US market holiday and a thin calendar today, trading activities would continue to be low. Yen crosses gap higher but quickly lose momentum. After all, the current retreat in yen is generally viewed as a pull back in the short term down trend only and further strength is still anticipated after today's US holiday and the upcoming Obama inauguration.
UK Chancellor of Exchequer Darling will unveil the second UK bank rescue program, adding another 100b pounds to the 250b pounds committed by Prime Minister Brown last Oct. including insurance to underwrite mortgage-backed debt and troubled assets and plans to shrink Northern Rock's lending. Also, the UK government may increase stakes in RBS and Lloyds.
Released earlier, UK Rightmove House Price fell -1.9% mom in Jan, the 8th consecutive month of declines, after plunging -2.3% in the previous month. On annual basis, the gauge slipped -7.3%, the biggest drop since inception of the index in 2002. Japanese Industrial Production continued to contract for a third consecutive month by -8.5% in Nov.
In Switzerland, financial uncertainties and poor economic outlook continues to shrink private spending and November's retail sales is expected to have risen 1.5% yoy in November following a 2.9% gain in October.
Technically, Dollar index's retreat from 85.13 is still in progress but as discussed before, such retreat is expected to be contained well above 81.19 support and bring rally resumption. Above 84.27 will flip intraday bias back to the upside and further break of 85.13 will pave the way to retest 88.46 high.